An ambitious free trade agreement has been concluded between the EU and New Zealand, and bilateral trade is expected to grow by around 30 percent. ”This agreement will make it easier for the companies in both countries,” write trade experts at the Confederation for Swedish Enterprise.
The EU and New Zealand has concluded talks for a free trade agreement following four years of negotiations. It will mean new economic opportunities for companies and consumers on both sides. The Confederation of Swedish Enterprise is positive about this, and believes that it shows that the EU is capable of negotiating ambitious free trade agreements with market access for goods, services and public procurement. Now, it is important that the agreement goes through the remaining steps as quickly as possible in order for it to enter into force as soon as possible.
The agreement now means that duties are removed or reduced for both industrial goods as for consumer and agricultural products such as foods. The agreement will also make it simpler for companies to trade in services and facilitate digital trade, and includes - among other things - a ban on requirements for data localisation. In addition, access to the New Zealand procurement market for goods, services, construction contracts and building concessions has been improved.
EU exports receive a genuine boost
The European Commission, which negotiated the agreement on behalf of the EU, believes that the agreement will give exports to New Zealand a genuine boost. It expects bilateral trade to grow by up to 30% as a result of the agreement. EU investments in New Zealand are also expected to increase by up to 80 percent.
One novelty in the EU’s free trade agreement is how the commitments in the area of sustainability will be handled. For the first time, the EU has agreed that the agreement’s sustainability chapter should be subject to sanctions in the event of any breach of the agreement. This means that if a party does not respect its commitments in the climate field (the Paris Agreement) or in labour law (ILO Conventions), sanctions – the withdrawal of market access – can be introduced as a last resort.
In recent years, the EU has had some difficulties with free trade agreements. Sweden, together with several like-minded countries within the Union, has pushed for the EU to negotiate more agreements and approve those that have already been negotiated in order to facilitate trade for companies. Many also believe that this new agreement between the EU and New Zealand comes at an important time from a geopolitical perspective. Democracies, such as the EU and New Zealand, need to work together and strengthen relationships in light of what is currently happening in the world.
The next step is for the text of the agreement to be published and then undergo legal review before being translated into all official EU languages. Both the European Council and the European Parliament, as well as the New Zealand Parliament, must ratify the agreement before it can enter into force.EUFree trade